FxWirePro: Ray of optimism for AUD/NZD bulls after equi-distant downward travel on channel breach, major downtrend still wedged in range

Chart and candlestick patterns formed: The AUDNZD bulls are attempting to make upside traction in both the minor trend and major consolidation phase. 

In this process, bears managed to breach rising channel support and make equi-distant downward travel (refer daily plotting).

Bulls are hovering at strong support while both momentum and trend indicators have also been signalling buying sentiments. But, upswings are restrained below 21DMAs.

The major consolidation phase that has lasted for more than 4 and a half years now stuck in range, both leading oscillators indicate strength in rallies (refer monthly plotting). Overall, some sort of consolidation just above 1.1050 is foreseen, and then a resumption of the multi-month points.

Trade tips: 

One-touch call options: Contemplating bullish sentiments in the near-terms, if the prevailing rallies sustain above 1.0656 levels, then, bulls are most likely to extend further upto 1.0698 levels. Thus, at spot reference: 1.0664 levels, one-touch option strategy is advocated on intraday trading basis, using upper strikes at 1.0698 levels.

The trading strategy likely to fetch yields that would be exponential than spot trades when the forward FX prices keeps spiking higher upto upper strikes on the expiration.

Short hedge: Alternatively, on hedging grounds, long-term investors are advised to stay short in futures contracts of mid-month tenors. The writers of the futures contract are expected to maintain margins in order to open and maintain a short futures position.

Currency Strength Index: FxWirePro's hourly AUD spot index is inching towards -5 levels (which is neutral), while hourly NZD spot index was at 20 (mildly bullish) while articulating (at 06:02 GMT). For more details on the index, please refer below weblink:

http://www.fxwirepro.com/currencyindex